That middle name is the arresting one. It derives from a leper house that once stood in the nearby village of Ballyoughteragh, a reminder that medieval and early modern settlements were often shaped by institutions we have since entirely erased from the landscape. The town itself grew up around a tower house and bawn, the bawn being the defensive walled enclosure that typically surrounded such structures, and a 16th or 17th-century house still stands immediately to the west of the tower house, a quietly anomalous survival in what is now an ordinary Irish town.

The history of the castle and its domain is a catalogue of some of the most consequential figures in Munster's turbulent later history. Following the Desmond confiscations, through which the Crown seized the vast landholdings of the Fitzgerald Earls of Desmond after their rebellion in the late 16th century, the castle was granted to Sir Walter Raleigh. He sold it on, and it eventually passed to Sir Richard Boyle, one of the great accumulators of confiscated Irish land in the early 17th century. It was Boyle's son, the Earl of Orrery, who laid out the present town to the east of the castle, giving Castlemartyr something of a planned character unusual for a settlement of its size. The Cromwellian wars brought repeated plundering and partial destruction, yet the town recovered sufficiently to be incorporated as a free borough under a charter granted by Charles II in 1675, a status that reflected its modest but real place in the administrative geography of the period.